Shanghai Pengxin unit ends attempt to buy Northland farms, citing 5 months of silence from OIO, Lochinver rejection
By Jonathan Underhill
Oct. 12 (BusinessDesk) - Dakang New Zealand Farm Group, which is 55 percent owned by Shanghai Pengxin, has quit efforts to buy 10 farms in Northland, citing five months of silence from the Overseas Investment Office since it applied for clearance and its experience trying to buy Lochinver Station, which was scuttled by the government.
Dakang entered into a sale and purchase agreement to buy seven dairy and three support farms in Northland from Pinny Farms, the region's largest milk supplier. Dakang applied to the OIO in April for clearance to buy the 3,300 hectares of land milking 3,900 cows.
Dakang chief executive Gary Romano said he had expected five months would be "sufficient time to enable a rigorous and objective review of our plans for the farms, compared to the 70 working day guideline the OIO has for turning around applications."
“However, to date we have not received any advice that the OIO has considered the sale and/or made a recommendation to the ministers," Romano said in a statement. He declined to comment when asked whether Dakang had received any unofficial signals that the sale wouldn't be cleared.
The decision to quit the sale comes about a month after associate Finance Minister Paula Bennett and Land Information Minister Louise Upston rejected OIO's recommendation to approve the $88 million Lochinver sale to Shanghai Pengxin, saying the deal failed on the test of providing a substantial benefit to New Zealand. That decision, too, was subject to long delay and drew criticism from owner Stevenson Group, which said the government was trampling on its right to get the best possible price for the 13,843 hectare farm near Lake Taupo.
The Shanghai-based group already owns the 8,000 ha Crafar farms and a controlling stake in SFL Holdings, which bought 4,000 ha of Canterbury farms from Synlait Farms.
“Our decision to end the agreement (with Pinny) is somewhat based on our experience with Lochinver where the sale and purchase agreement had to be extended 11 times, each extension causing frustration and pain to the vendors, and uncertainty for everyone involved," Romano said. "We simply are not confident enough of a favourable outcome to warrant putting the Northland vendors through a similar experience.”
Pinny Farms is run by Merv and Cara Pinny from their headquarters in Kerikeri.